TIDMTMIP TIDMTMI
RNS Number : 3555V
Taylor Maritime Investments Limited
13 December 2021
13 December 2021
Taylor Maritime Investments Limited (the "Company")
Acquisition of 22.6% stake in Grindrod Shipping Holdings for
$77.9m
Sale of two vessels at c.100% IRR for $42.8m
Delivery of two acquired vessels at yields in excess of 20%
Taylor Maritime Investments Limited (TMI / TMIP), the specialist
dry bulk shipping company, is pleased to announce that it has
agreed to acquire a 22.6% stake in Grindrod Shipping Holdings Ltd,
a dual NASDAQ and Johannesburg Stock Exchange listed shipping
business (NASDAQ: GRIN, JSE: GSH, "Grindrod Shipping"), for a cash
consideration of $77.9m via a private, off-market acquisition from
a wholly-owned subsidiary of Remgro Limited, Grindrod Shipping's
largest shareholder (the "Acquisition").
Key highlights of the Acquisition:
-- Grindrod Shipping is an international shipping company which
owns an attractive, modern fleet of 25 predominantly Japanese built
geared dry bulk vessels which is highly complementary to TMI's
portfolio
-- The Acquisition will be internally funded from the sale of
two Chinese built vessels for a combined $42.8m of proceeds
(representing IRRs of c.100% on each vessel and a MOIC of 1.5x),
cash on the balance sheet and short-term drawings on the Company's
revolving credit facility
-- The Acquisition at $18.00 per Grindrod Shipping share is at
an attractive price in the light of the company's prospects and
represents an annualized dividend yield of 16% (based on Grindrod
Shipping's declared dividend for Q3'21)
-- Including a 2.2% position already acquired by TMI in the open
market, TMI will own 24.8% of Grindrod Shipping's shares
-- The Acquisition is expected to close in early 2022 and not later than 28 February 2022
The investment in Grindrod Shipping is consistent with TMI's
strategy of seeking accretive growth opportunities to increase
shareholder returns at a time when dry bulk market fundamentals
remain strong with a historically low order book and a robust
global demand outlook. The Acquisition is also consistent with its
policy of fleet renewal through the selective disposal of assets.
Grindrod Shipping's fleet is highly complementary to TMI's existing
portfolio with an average age of six years and above average energy
efficiency compared with peers.
Edward Buttery, Chief Executive Officer, commented :
"We believe the investment in Grindrod Shipping is an excellent
opportunity where we know and respect the company which has a
high-quality, young and complementary fleet. The Acquisition will
be internally funded by asset sales at premium valuations, cash on
the balance sheet and prudent, short-term use of the Company's
revolving credit facility.
Grindrod Shipping is a highly cash generative business and our
investment is expected to be accretive from both a capital and
income perspective with no impact on our dividend policy, our
potential to pay an extraordinary dividend nor on our ungeared long
term capital structure."
Prior to the Acquisition, the Company consulted with a number of
its Shareholders to gauge their feedback as to the terms of the
Acquisition. Feedback from this consultation was supportive and as
a result the Board has chosen to proceed with the Acquisition.
A call for investors and analysts to discuss the Acquisition
will take place today at 10.00 a.m. GMT. Please find registration
details here:
https://us02web.zoom.us/j/84359991206?pwd=Zmh1aTlhWWdvTGVFS0NSNnd6cVFPQT09
Meeting ID: 843 5999 1206
Passcode: 946871
Vessel deliveries
The Company also announces the delivery on 29 November of two
geared Handysize bulk carriers to its trading fleet. One vessel was
committed for purchase at the time of the Company's IPO (Seed Asset
22 as described the IPO prospectus) and the second vessel was
committed for purchase in June (announced 16 June). These two ships
increase the total delivered fleet to 29 vessels (including the two
Chinese built ships committed for sale).
Both of the acquired vessels are fixed on short period time
charters at average annualized unlevered gross cash yields of over
20% based on fair market values as at 30 September. The final three
committed ships are expected to be delivered by the end of
January.
For further information, please contact:
Taylor Maritime Investments Limited IR@tminvestments.com
Edward Buttery
Alexander Slee
Jefferies International Limited
Stuart Klein
Gaudi Le Roux +44 20 7029 8000
Montfort Communications TMI@montfort.london
Nick Bastin
Alison Allfrey
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation EU 596/2014 as it forms
part of retained EU law (as defined in the European Union
(Withdrawal) Act 2018).
Notes to Editors
About Grindrod Shipping
Grindrod Shipping is a Singapore incorporated, dry bulk owner
operator that is dual listed on NASDAQ and the Johannesburg Stock
Exchange. Grindrod Shipping focuses on smaller, geared vessel
categories similar to those of TMI's fleet.
Grindrod Shipping owns 25 vessels which are mostly Japanese
built, including 15 Handysize vessels (11 Japanese built), nine
Supramax and Ultramax vessels (all Japanese built) and one MR
(medium range) Product Tanker (Korean built), with an average age
of six years. Grindrod Shipping also has seven vessels in its
chartered in fleet with purchase options on five.
Grindrod Shipping has a longstanding history in shipping having
been founded in South Africa in 1910. Since Grindrod Shipping's
public listing in 2018 it has streamlined its asset ownership
structure and concentrated on dry bulk.
Grindrod Shipping reported record gross profit, adjusted EBITDA
and adjusted net income for the three months ended 30 September
2021. Grindrod Shipping also declared a Q3'21 cash dividend of
US$0.72 per ordinary share and announced that it intended to return
30% of net income in future periods to shareholders through
dividends and share repurchases.
About TMI
Taylor Maritime Investments Limited is a recently established,
internally managed investment company listed on the Premium Segment
of the Official List and traded on the Main Market of the London
Stock Exchange. The Company invests in a diversified portfolio of
vessels which are primarily second-hand and which, historically,
have demonstrated average yields in excess of the Company's target
dividend yield of 7% p.a. (on the Initial Issue Price).
The Company's initial investments comprise Geared Ships
(Handysize and Supramax types) employed utilising a variety of
employment/Charter strategies.
The Company intends to pay dividends on a quarterly basis with
dividends declared in January, April, July and October. The Company
declared its first dividend of 1.75 cents per Ordinary Share for
the initial period ended 30 September 2021 in October 2021. The
Company targets a Total NAV Return of 10 to 12% p.a. (net of
expenses and fees but excluding any tax payable by Shareholders)
over the medium to long term.
The Company has the benefit of an experienced Executive Team led
by Edward Buttery. The Executive Team have to date worked closely
together for the Commercial Manager, Taylor Maritime. Established
in 2014, Taylor Maritime is a privately owned ship-owning and
management business with a seasoned team that includes the founders
of dry bulk shipping company Pacific Basin Shipping (listed in Hong
Kong 2343.HK) and gas shipping company BW Epic Kosan (formerly Epic
Shipping) (listed in Oslo BWEK:NO). Taylor Maritime's team of
experienced industry professionals are based in Hong Kong and
London.
For more information, please visit
www.taylormaritimeinvestments.com .
About Geared vessels
The Company specializes in the acquisition and chartering of
vessels in the Handysize and Supramax bulk carrier segments of the
global shipping sector. Geared vessels are characterised by their
own loading equipment. The Handysize market segment is particularly
attractive, given the flexibility, versatility and port
accessibility of these vessels which carry necessity goods -
principally food and products related to infrastructure building -
ensuring broad diversification of fleet activity.
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END
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